The State of Green Business 2009: The Green Economy Gains Currency

The State of Green Business 2009: The Green Economy Gains Currency

[Editor's Note: To celebrate the launch of our second annual State of Green Business Report, every day for the next two weeks, we'll be running through one of the big trends that are shaping the future of the greening of mainstream business. You can download the report for free from GreenBiz.com.]

It was the best of times and -- well, you know the rest. The greening of mainstream companies during 2008 continued more or less unabated on its multi-year trajectory, with a growing number of global companies joining in with increasingly more substantive commitments and achievements. But economic woes rocked corporate strategy much as it did everything else, leading to cutbacks, layoffs, and uncertainty about how,and how much, companies would be able to invest in new technologies and initiatives to support green innovations or reduce their environmental impacts. All this during a time of transformation, as a new U.S. president and Congress prepared to unleash an unprecedented number of initiatives aimed at stimulating a new green economy.

Good news ... bad news ... good news. It felt at times during 2008 that one needed a neckbrace. We don't expect to be removing it much during 2009.

The notion of a green economy -- economic activity by companies and customers in the form of products,services, and business models that promote economic growth, reduced environmental impacts, and improved social well-being -- gathered steam in 2008.One key driver: the U.S. presidential campaign, the first ever where both major-party candidates discussed accelerating investments in alternative energy, electric vehicles, a "smart" electric grid, and, not insignificantly,the green jobs these things would create. The conversation accelerated during the fall, as the economy tanked and unemployment rose. Suddenly, the green economy was seen as a pathway out of economic gloom.

The year produced a small library of studies showing the potential for creating millions of green jobs for both blue and white collar workers, though the studies varied about what kinds of jobs fell under the "green" rubric. One study showed how 45 occupations employing more than 14 million people across the country can be boosted through investments in green measures. Another saw the creation of two million jobs in two years. Still another projected4.2 million green jobs . Globally, the United Nations predicted that renewable energy could create 20 million jobs by 2030.

How much would all this cost? The plans and studies varied widely. Research by the nonprofit Apollo Alliance concluded that a $500 billion investment over 10 years on a range of energy,education, construction, building, and manufacturing programs would create 5million jobs. Another study, from the University of Massachusetts at Amherst,found that $100 billion would yield 2 million new jobs -- about half the price per job of the Apollo study.

At whatever price,green jobs seemed red hot around the world. The think tank Worldwatch revealed that renewable energy already employs, directly or indirectly, 2.3 million people worldwide "with the largest gains made where governments support renewables." Acre Resources, a U.K. recruitment firm, reported it had seen a 20 percent increase in the number of green-collar jobs in just one year. Jobs related to energy reduction and emissions management alone increased by 180 percent. A British government study predicted 1 million green-collar workers over the next 20years.

But studies don't equate to jobs, and it remained unclear when and where, exactly, the green-job boon would take place. There are relatively few pockets of green-collar workers anywhere, despite several cities' and states' efforts to tap into alternative energy, green building, electric cars, and other clean technologies as a means of economic and workforce development. One reason for the slow growth of green jobs: Many big companies creating cleantech businesses are simply hiring from within, or are repurposing existing staff, with few net new jobs created. And few start-ups have scaled sufficiently to be significant employers.

Another challenge is a lack of qualified workers many of these industries need, according to experts. Moreover, say critics, employers are applying 20th-century hiring expectations to 21st-century industries, such as asking for years-long experience in fields that are relatively nascent.

But the recession is changing the rules, and all signs are that the Obama administration will embrace a range of policies and initiatives to jump start America's cleantech sector, with job creation joining energy independence and national security as patriotic rallying cries. Wal-Mart, too: The discount retailer launched a green jobs council in partnership with many of its leading suppliers of goods and services in an effort to help rebuild and retool America's workforce. We'll see if America's low-cost retailer can also be a green-jobs machine.